Skilled migration is one of the policy levers available to governments to address workforce shortages in the economy. It is not the only lever – others include vocational and higher education and employment services programs. Not all the levers can produce the same results in a timely way. In terms of filling immediate skills shortages, skilled migration can produce timely results.
As outlined in the Interim Report the Committee has consistently heard that Australian employers will choose Australians over skilled migrants, and that choosing a skilled migrant to fill a role often helps to create other Australian jobs.
In gathering evidence for this final report the Committee considered skilled migration in the context of the other levers available to government. It became apparent that greater coordination of effort across the Commonwealth and across jurisdictions is needed to identify labour shortages and formulate the appropriate policy response to those shortages.
During this inquiry, one of the key aspects of the skilled migration program that emerged in evidence was the role that skilled migration plays in filling workforce shortages.
Dr George Tan, Associate Professor Andrew Taylor and Professor Ly Tran noted the historic importance of migration in Australia:
The focus of Australia’s migration program has shifted over time particularly in the post-war era the ‘Populate or Perish’ post-war immigration drive to shore up national security and ensure a sufficient supply of labour in the 1950s and 1960s for its manufacturing industries.
Dr Tan et al. stated that the focus has shifted in recent decades, placing a greater emphasis on skilled migration in relation to meeting skills shortages. They went on to recommend that there should be greater clarity on the role of skilled migration in economic recovery and building the workforce for Australia’s recovery from the pandemic:
Moving forward, we recommend that the purpose of the skilled migration programme clearly articulate the role of immigration in Australia post-COVID-19 akin to the post-war undertone for connecting pro-migration policies to economic recovery and nation building…
The Australian Chamber of Commerce and Industry (ACCI) noted the importance of effective assessment of national skills shortages, not just in terms of the skilled migration program:
Accurately identifying labour market needs across the country is a vital exercise that needs to be undertaken in the broader context of developing skills in the economy. However, skills shortage assessment for employer sponsored skilled migration (temporary and permanent) is inadequate to identify all skill needs experienced by business across the country.
On an industry level, there have been recent efforts to effectively identify solutions to workforce shortages. For example, the Aged Care Workforce Industry Council raised a recommendation of the Royal Commission into Aged Care Quality and Safety. The Royal Commission recommended the ‘establishment of an Aged Care Workforce Planning Division within the Australian Department of Health’.
This proposed planning body would consider a wide range of workforce inputs, including ‘modelling, consultation with providers and consideration of immigration’.
Similarly, the Australian Hotels Association (AHA) and Tourism Accommodation Australia (TAA) noted the importance of both the temporary and permanent skilled migration programs ‘as highly valuable components of workforce planning and development’ in the hospitality and accommodation industries.
According to AHA and TAA:
Skilled migration is a vital tool that assists individual businesses who experience skill shortages as well as fill skilled gaps in the broader economy. When a business needs to expand or replace a departing worker, skill[ed] migration provides access to skilled workers that are not otherwise available. Without this option, the licensed hospitality and accommodation industry is negatively affected. This impacts on overall economic activity, and therefore reduces the job opportunities available to Australian workers.
Within agriculture, migration is considered an important component of the current and future workforce. The National Farmers’ Federation (NFF) noted that:
The migrant worker intake should reflect our immediate and future skilled labour needs. And while it should complement domestic training arrangements — which must deliver the backbone of Australia’s skilled labour — it must also be accessible and flexible enough to enable farms to fill actual and projected gaps in labour market activity.
The NFF further stated that consideration of the appropriate migration settings within this context poses a challenge to policy makers and industry, particularly in ensuring that the role of migration does not compromise ‘efforts to maintain and grow the domestic workforce’.
The National Agricultural Workforce Strategy (NAWS) examined the importance of workforce data in policy which effectively supports current and future workforce requirements in the agriculture industry. It found that accurate data was critical to many aspects of training and planning to meet future needs:
Skills and training providers need to understand both numbers of jobs and skills required to ensure the right training is available.
Information on how labour requirements are changing in different communities enables better planning to support those workers, for example through ensuring sufficient availability of housing and services such as education and health.
At a national scale, understanding change in workforces enables forward planning to meet emerging labour demands, both in terms of number of jobs required and in terms of the types of skills required.
The NAWS further found that the data currently collected by the Australian Bureau of Statistics, the Australian Bureau of Agricultural and Resource Economics and Sciences, and various rural research and development corporations was typically standalone, and ‘cannot be readily integrated with each other to form a more comprehensive picture’.
According to the NAWS, the various data sets ‘only produce a limited insight into one aspect of the workforce’, and ‘are not collected consistently over time, reducing the ability to understand trends in the workforce’. As a result, the available data on the agricultural workforce currently does not provide a comprehensive picture of the current status or future requirements of the Australian agricultural workforce.
Australian International Skilled Recruitment Services (AISRS) was also critical of the approach to understanding workforce requirements and shortages at a national level. It noted that the current approach to examining skills shortages had shortcomings that affect regional areas:
Making decisions at the national level that particular occupations, are in ‘approximate balance’ masks shortages in regional areas due to oversupply in capital cities. This leads to occupations being in shortage in regional areas, which causes regional communities to go slowly in a ‘death spiral’ due to the lack of skilled workers to support local hospitals, infrastructure, the local economy et al.
ACCI similarly argued that a national skills assessment approach has significant shortcomings, stating that such an assessment cannot identify ‘the shortages experienced by an individual business, in a particular location, at a particular point in time’, even if a ‘rich and diverse data set capable of constantly adapting to capture market conditions’ is available.
The Committee for the Economic Development of Australia (CEDA) argued the need for ‘a clear nexus between the temporary skilled migration system and the education and training systems’. According to CEDA, this includes ‘aligning the Skilling Australians Fund to the skills shortages that give rise to the need for temporary skilled migration in the first place’.
The Victorian TAFE Association told the Committee that, particularly in relation to vocational education and training (VET), industry plays a key role in ensuring the training available is meeting the needs of employers. According to the Victorian TAFE Association:
Industry, on behalf of and informed by employers, is responsible for setting standards and providing the skills intelligence around current and emerging skill needs to inform the planning of skills and training, and training providers are responsible for the delivery of training. Industry creates jobs and employment, and thereby the demand for training to meet their skill needs. In working collaboratively with local employers and employing industries, training providers respond by offering courses and qualifications and by marketing to encourage people to take up the opportunities available.
The Australian Computer Society (ACS) discussed the perceived disconnect between the higher education sector and the skills needs in the Australian economy. Specifically, it noted that ‘universities can’t create the courses that are needed if students don’t take them up’, and that domestic enrolments in ICT-related courses declined after peaking in the early 2000s. While in recent years, enrolments have increased, ACS still stated that ‘there remains a gap which we supplement by skilled migration’.
Swinburne University of Technology similarly argued that skilled migration plays an important role in filling immediate workforce gaps while Australians are being trained through the vocational education and university system:
As a university of technology, we are acutely aware that in order to keep apace of innovation Australia must have a workforce that is able to propel digitisation across industries. While there should be a parallel effort to develop native expertise in this area, through measures which incentivise upskilling and lifelong learning, this must be complemented by migration settings that address immediate needs.
Mr Mark Glazbrook raised the perceived lack of the relevant data required to effectively underpin any assessment of skills shortages, noting that:
If an occupation is not listed on ANZSCO, the Federal Government will be unable to report on the occupation being in demand as technically it does not exist, even though it is possible to study formal qualifications in production horticulture approved by the Federal Government – this references and evidences the inconsistencies between some Federal Government departments namely the Department of Home Affairs and the Department of Education, Skills and Employment.
The Committee heard from a range of government agencies on efforts to coordinate and gain the strongest possible understanding of the range of available means of addressing workforce shortages.
For example, the Department of Home Affairs (Home Affairs) discussed the role of migration, education, and local jobseekers in addressing identified labour shortages:
…each of those operates on a different time scale, there is a need for coordination of effort between us and our colleagues, particularly in employment, right across the government in terms of what we can do now. In some respects, the skilled migration program offers a shorter term response by bringing people in who are already skilled, and then that allows for training and other opportunities to be provided for Australians onshore or others who might be onshore already.
In relation to skilled migration, Home Affairs noted that state and territory governments play a role through the Skilled Migration Officials Group, which meets three to four times a year and is composed of ‘departmental officials and other Commonwealth departmental officials as well as state and territory officials who have a responsibility for their own skilled migration programs’.
The National Skills Commission (NSC) was formed in July 2020 to, in part, advise the relevant minister on matters including ‘Australia’s current, emerging and future workforce skills needs’. According to its submission, the NSC’s ‘labour market analysis supports the objective of Australia’s skilled migration program, which is to deliver economic benefits by enhancing productivity and job creation’.
The National Skills Commissioner, Mr Adam Boyton, elaborated on the NSC’s work:
Some of the thinking behind having a body like the National Skills Commission is to actually build a consistent view of the labour market that informs not only skilled migration thinking but also thinking around education and, in particular for the National Skills Commission, vocational education and training.
In pursuit of these objectives, the NSC is currently developing a Skilled Priority List (SPL):
The SPL will help policy makers understand the skilled workforce needs of the Australian economy and may be used to inform policy responses (such as training, employer incentives and migration). The NSC will also undertake supplementary labour market analysis—using previous elements of the labour market indicator model that informed previous SMOL reviews and updates—and will also consult relevant Commonwealth departments.
Mr Boyton explained the intended use of the SPL as ‘a backbone piece of labour market analysis’ designed to ‘inform not just thinking around skilled migration but also thinking around vocational education and training and what the broad skills needs of the economy may be’.
According to Mr Boyton:
The point of doing that is that you have one piece of evidence that policymakers can then use in order to think: 'How do I respond to the skills shortage over here? Do I respond to that with a migration response, a skilling response or some combination of the two?'
In addition to the role played by Home Affairs and the NSC, the Department of Education, Skills and Employment (DESE) administers programs designed to fill labour shortages through the placement of Australian workers. An example of this is seasonal work programs relating to agricultural work:
Part of that is bringing in workers from the Pacific for seasonal labour shortages, but, alongside that, we run the Harvest Trail service which looks at providing incentives to get Australians into work. For example, we look at targeting both unemployed Australians on our caseloads and other Australians, and we provide incentives. We pay our providers incentives for placement but also for sustainability of jobs. We've also introduced relocation assistance to assist relocation of workers to short-term agricultural work.
More generally, DESE also administers programs that engage with employers to get ‘jobseekers on activity tested payments in front of employers’. According to DESE:
The government has recently announced its new employment services model which will commence in July next year. Part of that will be a much more effective approach to engaging with employers and working across all the various skill systems to get jobseekers trained up to meet the needs of employers.
In addition to engaging in analysis at the lower-skilled end of the labour market, DESE discussed examples of its work giving higher-skilled Australians ‘better advice on career opportunities and giving them a much more up-to-date sense of emerging opportunities’ through the work of the National Careers Institute and the NSC.
For example, DESE told the Committee that:
…one of the tools that people can access is some machine-learning based programs where they can look up where the jobs are growing in their area and get a sense of how their existing skills match those jobs and demand and where additional training would make them more competitive for other opportunities and then directly see where that training is on tap in their local area.
In terms of region-specific workforce shortages and gaps, DESE noted that while the ‘labour market at the high level looks quite healthy’, it needs to be unpacked to see the industries and regions ‘where the hotspots are’.
DESE outlined a recent initiative called the local jobs measure directed at addressing the regional and industry variations:
As part of this measure we have employment facilitators engaged in regions, and they do an analysis in partnership with the National Skills Commission. It dissects what's going on in a region. It looks at what the unemployed case load is, who the people are, what the industries are and where the shortages might be and it looks at the training pipeline—what VET courses are available, what JobTrainer places are there—and tries to bring it all together. So, local task forces problem-solve that data and come up with strategies to try to bring the bits together.
While not explicitly a part of the terms of reference of this inquiry, understanding the nature and extent of workforce shortages and the policy responses to them quickly emerged as a key issue underpinning this inquiry.
Skilled migration is one means by which such workforce shortages can be addressed. Other means canvassed during this inquiry include through training and education, and finding employment for suitably skilled unemployed Australians (although employment services tend to play a greater role in relation to filling semi-skilled and unskilled workforce gaps).
The Committee received evidence from many different sectors of the economy, many of which were represented by peak bodies who were able to provide statistics from their membership self-reporting on labour shortages. While this information was very useful it did not provide a comprehensive, economy-wide picture of Australia’s workforce shortages in a way that can allow workable long-term solutions to be devised.
Further, the Committee heard from Australian Government agencies that raised examples of recent efforts to quantify labour shortages, and outlined the steps being taken to address them.
While the Committee notes the recent work of the NSC and the Skilled Migration Officials Group as a good start, the Committee does not have confidence that the current sources of information and advice provide a comprehensive picture of Australia’s workforce shortages. The Committee is also not convinced that there is sufficient coordination across the Commonwealth, States and Territories in providing the appropriate policy responses to these shortages. There is also insufficient real time information about skills shortages across the country but particularly in regional areas.
In order to effectively address the many labour shortages which have been raised with the Committee in submissions and public hearings, the Committee sees a need for a comprehensive approach to identifying and planning for current and future workforce needs and their location. Understanding where skills gaps currently exist, what skills are under development and likely to become available domestically in the future, and what industries are subject to current, emerging and future workforce shortages is key to understanding the occupations requiring skilled migrants now and into the future.
Such an assessment will require two key responses. One is a coordinated approach across the Commonwealth and across jurisdictions. The other is a more coordinated approach to data gathering and analysis. Aggregating the collected data, to be analysed by a cross-agency and cross-jurisdictional body to produce a coordinated national workforce plan will not only assist in ensuring that any labour shortages are both understood and addressed as effectively as possible, it will also provide a more solid foundation for planning migration numbers and the specific types of visas and occupations that are targeted by the migration intake. A more coordinated approach will also further bolster public confidence in the skilled migration program.
The Committee recommends that building on the work of the National Skills Commission (NSC) and the Skilled Migration Officials Group, the Federal Government develop a dynamic national workforce plan. The plan would co-ordinate the efforts of State and Federal Governments to ensure Australia’s persistent skills shortages and future workforce needs are addressed through Australia’s higher education and vocational education systems, employment services and the skilled migration program. This plan should be regularly updated. In order to develop the plan:
A cross-portfolio, cross-jurisdictional interagency committee (IAC) should be established, meet regularly, and comprise decision-makers from departments and agencies, led by the NSC.
The NSC and relevant data collection bodies should also develop a data aggregation system that identifies skills shortages at a regional level by occupation.
Australia’s skilled migration program is underpinned by a range of skilled occupation lists. In its submission, Home Affairs stated that prior to 2 September 2020, these lists were:
The Short-term Skilled Occupations List (STSOL), containing occupations to address short-term labour market needs;
The Medium and Long-term Strategic Skills List (MLTSSL), designed to fill high value occupations over the long-term; and
The Regional Occupation List (ROL), comprising additional occupations available to regional employers.
Home Affairs noted that these lists are regularly reviewed and updated with input from DESE and the NSC. The review process incorporates labour market analysis, consultation with key stakeholders such as industry, government and the public, to ensure ‘skilled migration remains responsive to labour market needs’.
In September 2020, the Priority Migration Skilled Occupation List (PMSOL) was added to the existing skilled occupation lists. Home Affairs stated that this list identified:
…occupations that are considered to be critical for the recovery of the Australian economy, based on expert labour market advice from the NSC. Employer sponsored visa applications involving PMSOL occupations receive priority processing and may be considered for exemption from travel restrictions.
Initially, the PMSOL included 17 occupations, mostly relating to the medical field. Subsequently in November 2020, on advice from the NSC, the occupation of social worker was added to the list, and in May 2021 the occupation of veterinarian was also added.
On 22 June 2021, 22 new occupations were added to the PMSOL:
Medical Laboratory Scientist
Software and Applications Programmer
Home Affairs told the Committee that:
The PMSOL will be temporary and prioritisation of these occupations will change as Australia recovers from the pandemic. The NSC continues to monitor the impacts of COVID-19 upon the Australian labour market and skills needs as they evolve and new sources of data emerge.
The Committee received extensive feedback on the operation and utility of the skilled occupation lists, both in relation to temporary measures in place as a result of COVID-19 and the wider skilled occupation lists pre-dating the global pandemic. The remainder of this chapter examines this feedback.
Australian and New Zealand Statistical Classification of Occupations
All of the occupations on the PMSOL, STSOL, MLTSSL and ROL are underpinned by the Australian and New Zealand Statistical Classification of Occupations (ANZSCO) codes.
ANZSCO is ‘the product of a development program undertaken jointly’ by the Australian Bureau of Statistics (ABS) and Statistics New Zealand (Statistics NZ), and it ‘provides a basis for the standardised collection, analysis and dissemination of occupation data for Australia and New Zealand’.
ABS and Statistics NZ outlined the structure of ANZSCO:
The structure of ANZSCO has five hierarchical levels – major group, sub-major group, minor group, unit group and occupation. The categories at the most detailed level of the classification are termed ‘occupations’. These are grouped together to form ‘unit groups’, which in turn are grouped into ‘minor groups’. Minor groups are aggregated to form ‘sub-major groups’, which in turn are aggregated at the highest level to form ‘major groups’.
According to the Migration Institute of Australia (MIA), ‘fundamental to the problems with the skills lists’ is the use of ANZSCO as their basis. MIA elaborated:
It has been noted many times, the ANZSCO was never intended for that purpose, it was developed as a tool to facilitate the international comparison of occupational statistics and to provide a basis for the standard collection and dissemination of occupational data.
Additionally, MIA noted that ANZSCO has become outdated. It stated that ‘no new or emerging occupations have been added’ for almost 18 years, which reduces its effectiveness as the basis for the current skilled migration program.
ABS outlined the most recent updates to ANZSCO:
The last major change to ANZSCO was implemented in 2006. We did a review of it in 2013. That resulted in some small changes. There have been some very minor updates made, but basically there hasn’t been a major review with any kind of significant change since 2013 and going back to 2006.
MIA discussed the effect of the lack of an update, stating that despite remarkable changes in technology, industry and the labour market, ‘newer occupations cannot be added to the skills lists because they don’t exist in ANZSCO’. MIA argued that ‘either a new method of formulating the skills lists is required or the lists should be abandoned completely’.
According to Dr George Tan, Associate Professor Andrew Taylor and Professor Ly Tran, the outdated ANZSCO will also have a significant impact on future industries:
…particularly in the renewable energy generation and storage [sector], which is predicted to potentially create between 18,500 and 58,500 construction jobs with 12,500 ongoing jobs.
EY made similar criticisms of the use of ANZSCO to inform skilled occupation lists:
… ANZSCO no longer provides a solid foundation for Australia’s skilled temporary and permanent migration programs. It is widely accepted that ANZSCO is backwards looking and inflexible. It does not accommodate roles of the future that require multiskilling or capture emerging occupations. For specialist roles and emerging roles, it is often difficult to determine which, if any, classification is suitable. ANZSCO has no capacity to cater to industries of the future and provide a framework to support innovation in Australia.
VETASSESS echoed this concern:
We believe that significant changes need to be made to ANZSCO and the skills lists. Currently, the ANZSCO list, as we know, is old. It doesn’t take account of emerging occupations, and we think that is a shortfall in using ANZSCO around the skilled occupation lists.
Further, according to VETASSESS workers are facing a ‘double disruption’:
In addition to the disruption from the pandemic-induced lockdowns and economic contraction, technological adoption by companies is transforming tasks, jobs and skills.
CEDA also discussed the pace of change in occupations, noting that ‘technological change is really reshaping the workforce’ at a rate not seen before. As a result, ‘simple occupational classifications are changing very rapidly’.
Atlassian and Canva provided a specific example of this from the tech industry perspective:
The ANZSCO definition of the nominated occupations does not align well with the new roles being created everyday by the tech industry, which have evolved well beyond the current classifications. Many roles were not in existence when the ANZSCO lists were created in the 1990s and therefore the ANZSCO lists fail to capture the specific roles in the tech industry that companies are in desperate need of. This forces us to nominate in short-term occupations even though those occupations as defined in ANZSCO do not adequately take account of the myriad of differences in the roles or the particular skill set needed by the business. In our view ANZSCO should not be the determiner of an ‘occupation’ or role for the purposes of nominating someone for a visa.
The Northern Territory Department of Industry, Tourism and Trade (DITT) noted that ‘ANZSCO does not reflect today’s job market’, stating that:
During stakeholder consultation and labour market research conducted this year during our annual review of the NT [Designated Area Migration Agreement (DAMA)], there was frustration amongst peak bodies and businesses that the current ANZSCO either did not contain the occupations in need in the NT, or that the classifications and descriptions of their required occupations were not accurate.
Similarly, the Government of South Australia noted that ANZSCO does not ‘provide an adequate representation of changing occupations and the skills and qualifications needed’. This leads to concern ‘about the extent to which the skills lists can adapt and incorporate emerging occupations, particularly in areas like ICT, engineering and Ag-Tech’.
DITT provided a specific example:
An example of the gap is in the case of a Workshop Foreman at a car repair workshop. While ANZSCO provides for a Motor Mechanic, there is no occupation that matches the tasks of a foreman who takes a supervisory role.
Consult Australia told the Committee that their members identified a range of emerging occupations not captured by ANZSCO including:
Digital Engineer/Building Information Modelling (BIM)
Human Factors Consultant.
The Association of Australian Medical Research Institutes raised a specific example from the medical research industry:
I think where we have problems is in some newly emerging occupations outside of medical research but close to medical research or around commercialisation, for example. We want to commercialise more of our research. It's a government priority too, and we're keen to do that, but to do that you need to bring in commercialisation experts, and we're not good at commercialisation in Australia. We're pretty lousy at it by global standards. So we're trying to bring people in from overseas with expertise who have the connections with the venture capitalists and with the big pharma companies. But what is that position? It's quite hard to put that on an ANZSCO list. Trying to do that is a bit of a square peg in a round hole.
CEDA provided an example of a recent addition to ANZSCO:
For example, in 2019 the Federal Government announced that data scientists would be classified as “information and organisation professionals NEC”, a group that also includes electoral officers and lobbyists, because this emerging and in-demand occupation was not previously classified by ANZSCO. Such band-aid solutions result from a system that is slow to respond to labour-market changes.
According to CEDA, the current approach to ANZSCO ‘hinders the ability to leverage the rapid digitisation undertaken by many businesses during COVID’, which in turns impedes opportunities for growth.
Mr Glazbrook argued that ANZSCO would always be subject to a lag in terms of emerging occupations as a result of the way it is compiled. Mr Glazbrook provided an example to illustrate:
As an example, production horticulturalist does not independently appear on the ANZSCO due to the way that occupations are coded based on information obtained through Census data collection. This does not mean the occupation does not exist, it simply means that not enough people stated they are working as a production horticulturalist at the time of the Census for the ABS to give production horticulturist its own ANZSCO occupation title, code and classification.
Improving the use of ANZSCO
One key suggestion for improving ANZSCO’s ability to inform the various skilled occupation lists was to conduct an update. For example, EY told the Committee that ‘at a minimum, ANZSCO must be updated as soon as possible’ by the ABS.
DITT agreed, and went on to recommend that regular reviews be mandated and adhered to.
Consult Australia argued with ‘technology improving and changing rapidly, and the future of work creating many new job types’, there should be regular monitoring and reviews of ANZSCO to ‘ensure that emerging occupations are appropriately captured’.
According to Consult Australia:
It is crucial that the National Skills Commission work with the Australian Bureau of Statistics to review and update the categories under ANZSCO on an ongoing basis to avoid the omittance of occupations from the Australian occupation market. Regular industry consultation, similar to those undertaken through the Skills Priority List, is needed to ensure occupations are not excluded and businesses are not required to supplement occupations to meet recruitment shortfalls.
ABS told the Committee that while an update of ANZSCO is ‘not an insurmountable amount of work’, it is nonetheless ‘a reasonably large undertaking’:
For each of the new occupations we need to be able to gauge the number of people working in those occupations, some of the underlying duties and tasks and some of the qualifications and experience needed in those occupations, in order to be able to add them into the classification and then be able to categorise people, within the census and within surveys and also within administrative processes, as belonging to that occupation. So it's more complicated than just adding some extra names or job titles into that classification.
ABS outlined its experience in previous ANZSCO revisions:
Certainly, previous large-scale reviews have generally taken years to do, just given the need to do not only some pretty extensive data analysis but also extensive consultation. So, in updating the occupation classification, we do engage with parts of the private sector, government and academia to help identify emerging occupations and understand those emerging occupations.
According to the ABS, resourcing constraints were a key factor in reviewing ANZSCO. ABS noted that in August 2018, it released a joint media statement with Statistics NZ stating that a review was not possible within existing resources.
Like the people who have contacted you through the inquiry and made submissions to the inquiry, we would also have liked to have been in a position where we could update that occupation classification every 10 years, which is how frequently it was done in the past. Ideally, we'd like to be doing it more frequently than that, but, given our resource constraints, that hasn't been possible. As a result, the classification, as people have noted, doesn't reflect the most contemporary view of occupations within the labour market.
On 25 March 2021, the ABS commenced a program of work to conduct a targeted update of ANZSCO. This update will apply a phased approach to producing a more complete ANZSCO that is reflective of the current labour market.
This update will focus on occupations associated with the agriculture, forestry and fisheries sector, cyber security, and naval ship building. Following this update, other sectors will be reviewed using this targeted approach in the future. According to the ABS, this will allow it ‘to be more responsive to changes in the labour market and the needs of stakeholders’.
Some submitters to this inquiry suggested a more fundamental change to informing skilled occupation lists.
For instance, MIA questioned the utility of using the full six-digit ANZSCO code – which describes occupations – by discussing the nursing profession:
…there are fourteen different six-digit codes for registered nurses including the catch all registered nurses ‘nec’ – not elsewhere classified. The MIA questions the utility of listing fourteen variations of registered nurse specialisation on each of the skilled migration lists. There is no differentiation in their nursing registration based on what type of nursing they undertake.
MIA provided an example of the effect using the six-digit ANZSCO code can have on employers, again using the nursing profession:
If a hospital has sponsored a registered nurse under the registered nurse medical ANZSCO 254418 code, they are unable to deploy that nurse to work under any other specialisation eg registered nurse surgical ANZSCO 254424 code within the hospital, because it is unlawful to employ the sponsored worker in a different role to which they are sponsored under the conditions of the employment sponsorship and the visa.
The hospital must first apply to sponsor the nurse again under the new ANZSCO code, which requires labour market testing, the payment of Skilling Australians Fund (SAF) levy and application costs. The nurse in turn requires a new visa at significant cost and importantly the three year period they are required to work before they can apply for permanent residency is restarted, their previous service is not counted.
Additionally, MIA discussed the practical difficulties employers face when the skilled workers they require are not covered by ANZSCO:
MIA members provided examples such as applicants skilled in running fully automated sheetmetal machinery who do not meet the ANZSCO occupation code for either sheetmetal tradesperson or machinery operator.
Listing occupations by ANZSCO four digit unit group codes would provide a degree of flexibility within the lists that would go some way towards accommodating not only Australian employer needs but also new and emerging skills sets within sub major unit groups.
In its submission, EY agreed that the use of the four digit ANZSCO level would offer a more flexible and modern mechanism, and recommended that the ‘reliance on ANZSCO as the basis for decision making and visa approval be replaced by’:
A list of ANZSCO occupations excluded from the skilled migration program; and
Listing occupations at the four-digit ANZSCO level rather than the six-digit level.
Consult Australia called for adaptability:
The ABS could seek to adapt current categories to include the occupations we have identified above. For example, the category ‘architects, designers, planners and surveyors’ could include BIM. Similarly, the category ‘transport engineers’ could be updated to include rail engineers.
VETASSESS argued that adding additional ‘not elsewhere classified’ (NEC) occupations to the skills lists would be a pragmatic suggestion. According to VETASSESS:
I can give you the classic example of data scientists, an occupation that's much talked about and in demand. That was not even part of ANZSCO until late 2019, so it has only just been incorporated into ANZSCO. Prior to that, anyone who genuinely had a data scientist background did not classify in any of the occupations, couldn't be mapped against any of the occupations in the classification, and therefore was being left out of the skilled migration program.
VETASSESS elaborated on how the inclusion of more NEC occupations could work:
…the skilled occupation list will never go down to the NEC level; it always lists the occupation at the broader unit level. For instance, 'data scientist' is included under 'information and organisation professional NEC'. If a data scientist wants to choose this occupation of 'data scientist' to come into Australia, they will nominate 'information and organisation professional NEC'. As long as the skilled migration program has decided, 'These are the broad occupations we want', the NECs can easily be catered for as long as they're meeting the broad objectives of Home Affairs.
Mr Glazbrook also called for the use of the NEC classification across skill level 1, 2, 3 and 4 occupations, noting that since the Department of Home Affairs moved away from including NEC codes and occupations in skills lists, ‘the migration program can no longer keep pace with Australia’s changing and emerging job landscape’.
ACS noted the inability of the existing skills list to keep pace with developments in some sectors, and argued that the use of ANZSCO to underpin them would lead to a failure to recognise emerging skills and occupations.
Instead, ACS recommended the adoption of industry specific qualifications such as the Skills Framework for the Information Age (SFIA) scheme. According to ACS:
SFIA describes skills and competencies required by professionals in roles involved in information and communication technologies, digital transformation and software engineering. SFIA 7 is the current version of the framework, published in June 2018.
ACS told the Committee that ‘adopting industry specific standards would go some way to addressing the current situation’ wherein skills in demand are not recognised in skills lists, and would ‘have an added benefit of helping skilled migrants to demonstrate their skills to Australian employers’.
The Committee agrees with the large number of submitters and witnesses who put the view that ANZSCO is severely outdated.
The Committee notes the recent announcement by the ABS that it is working with other government agencies to progress a targeted update of ANZSCO.
However, in the Committee’s view this approach does not go far enough. The Committee sees value in shifting to a new approach to underpin the skilled migration lists. ANZSCO was not designed to underpin the various skilled migration lists, and its shortcomings have been amply revealed by the long period in which ABS has not undertaken a comprehensive update.
Further, a phased approach to updating ANZSCO will not solve the continuing problems faced by skilled migrants in new and emerging occupations and the Australian employers seeking these skills.
The Committee received a number of thoughtful suggestions for reforming the use of ANZSCO. In the Committee’s view simply adapting the existing ANZSCO approach to inform skills lists will not help to solve the long-term problems with its use.
As has been noted many times in evidence, ANZSCO was not designed to support skilled migration lists. Its role is far more general, and any use of ANZSCO will essentially constitute adapting a relatively static statistical tool for a purpose for which it was not designed. Even if the laborious task of a full review of ANZSCO occurred it would take significant time and resources and would be out of date as soon as it was completed. ANZSCO has neither kept pace with emerging occupations nor been comprehensive about roles in more traditional fields. Therefore, the Committee believes a more fundamental change is required.
The Committee notes the alternatives to ANZSCO raised in evidence such as the example from ACS of industry specific standards discussed above. This approach could assist to provide the flexibility and responsiveness that can only be provided by a bespoke occupation list that has been designed specifically to cater to emerging labour market needs. There may be other approaches worth considering.
The Committee believes that the NSC should be responsible for occupation lists as the agency responsible for workforce planning.
The Committee does not take a view about whether any future list should be based on occupations or skills identification. This should be a matter for the NSC to consider in examining possible alternatives and developing a new means of underpinning the various skilled migration occupation lists.
The National Skills Commission should develop a new occupation and/or skills identification system for the skilled migration program in consultation with industry to replace ANZSCO. The new system should be more flexible to adapt to emerging labour market needs, with consideration given to how the new system would integrate with other functions of government currently utilising the ANZSCO.
Current skills shortages
In the Interim Report of the inquiry, the Committee recommended the inclusion of chefs, veterinarians, cafe and restaurant managers and seafarers on the PMSOL. The Committee notes that the Government has since added chefs and veterinarians to the PMSOL.
The Committee received further evidence from submitters and witnesses on the skills shortages that need addressing in the Australian workforce. Clubs Australia noted that while the inclusion of chefs on the PMSOL is essential for the recovery of the licensed clubs industry, it told the Committee that 72 per cent of clubs had recently reported a shortage of cooks. Clubs Australia argued that also including cooks on the PMSOL would ‘strengthen the opportunities for clubs to source cooks and suitably staff their kitchens’.
Clubs Australia further stated that this skill shortage ‘has been present in our industry for a decade’, and that while ‘temporary changes are necessary to improve the system in the short term’, there is also a need to improve the skilled migration system more generally.
Mapien considered that there is merit in identifying occupations that are subject to the enduring shortages discussed by Clubs Australia, and argued for a priority processing option for these occupations.
According to Mapien, the priority processing option for enduring skill shortages would be particularly useful for start-ups:
If there are businesses that are perhaps starting up in Australia or that don't meet the requirements for accredited sponsorship that would otherwise not have access to priority processing but that may have people with particular skills that are a priority, it levels that playing field.
In some cases, these skill shortages are driven by shifts within particular industries. The Motor Trades Association of Australia (MTAA) noted that the automotive sector was currently undergoing such a change:
The automotive sector and multiple industries within it are undergoing unprecedented structural adjustment brought about by external global influences, including automation, the rapid application of advanced technologies, market consolidation and the influence of powerful, dominant market participants, changing consumer behaviours to vehicle purchase and use, and increasing pressures and demands on the automotive sector for increased action in sustainable environment and energy management.
According to a recent MTAA survey, ‘52 per cent of automotive businesses report skill shortages negatively impacting on business’ and the other businesses that are reliant on them, such as infrastructure projects, mining, resources, heavy vehicles and others. The survey indicated that there is currently a shortage of 31,000 skilled positions, which is forecast to grow to 38,000 by 2023.
MTAA told the Committee that this was part of a widespread shortage across other developed countries:
We are witnessing extremely strong movements in terms of mobility of the workforce in other countries. Mechanics are in short supply in Europe, in the UK and invariably in a number of other countries, as are other automotive professions. We are aware of a lot of activity in terms of competing jurisdictional efforts to try to attract those people here.
Further, the MTAA noted that these shortages are not a recent occurrence, having ‘been around for some time’ and growing exponentially. These shortages are already affecting the automotive industry’s ability to support other key sectors of the Australian economy. According to MTAA:
The same thing applies to freight and logistics. If you can't repair heavy vehicles, if you can't repair trailers, if you can't service them, then those vehicles stay off the road and it has a concertina effect, obviously, on those operations. We have been told by many businesses that they are already having queues lasting from days to weeks now.
According to MTAA, the COVID-19 pandemic presents an ‘opportunity to rebalance and recalibrate skilled migration to address the critical skills shortage issues’, where access to skilled migration can assist to support the industry in the short-term, prevent a ‘diminished labour pool where the critical skills that we need today are not available’, while also ‘training the next generation of employees’ through a focus on addressing ‘the other issues of domestic skills enhancement’.
In this way, MTAA considered that it was possible to find ways to balance the training of apprentices and access to skilled migration so that they ‘can sit comfortably side by side’.
Adjunct Professor Kylie Ward, Chief Executive Officer of the Australian College of Nursing outlined the current nursing workforce shortages in Australia noting that there is an anticipated ongoing shortfall of nurses practicing in Australia:
The Australian Institute of Health and Welfare released a report, based on 2014 data, suggesting an overall nursing workforce shortage of over 80,000 nurses by 2025 and over 120,000 nurses by 2030. This has not been updated since. Furthermore, the Department of Health released RN workforce data stating that in 2019 there were 31,613 nurses working in aged care across the country, a growth of only 9.4 per cent since 2016. Yet it is estimated that by 2050 a further 180,000 to 200,000 nurses will be required in the aged-care sector alone.
Adjunct Professor Ward suggested that skilled migration will play an important role in filling current nursing shortages, resourcing and upskilling the workforce and meeting future demand for nurses in Australia but should not impact on jobs for newly qualified nurses:
The skills, experience and expertise required with targeted skilled migration would not disadvantage our newly qualified nurses. Rather, it would ensure that they are able to commence their careers in a supported environment. Graduating nurses require expert nurse leaders to support them as they transition from novice to expert … In short, we need to continue a targeted approach in attracting overseas trained skilled nurses to address a known shortfall and help protect the quality of Australia's nursing workforce, as well as, most importantly, to provide safe and appropriate care to all consumers.
It is clear to the Committee that many of the skill shortages canvassed in both the Interim Report and this report are not simply a product of the COVID-19 pandemic and resultant border closures. Some are in fact long-standing, and will likely continue once Australia’s international borders open.
Skilled migration is one of the potential means of addressing these persistent shortages. Education and training is another important aspect to ensure that Australian employers are able to access the skills they need. However, ensuring that young Australians are accessing the training needed to fill these gaps will not address the immediate issues employers and businesses are facing as Australia seeks to recover from the COVID-19 pandemic.
In order to effectively support Australia’s economic recovery from the pandemic, a short-term solution is required. The PMSOL has played a part in addressing these shortages, which is reflected by the staged expansion of the PMSOL since its inception in September 2020.
Putting aside the COVID-19 pandemic, the Australian economy is always likely to face at least some acute and persistent skills shortages. Where such shortages can be addressed by the skilled migration program those occupations should be placed on their own skills list and visa applicants seeking to fill those roles should have a more streamlined process and be allowed priority processing arrangements.
The Committee sees value in the development of clear definitions of what constitutes acute skill shortages and persistent skill shortages to enable more effective planning and concessions to fill these shortages. While the PMSOL was designed in response to the COVID-19 pandemic, in the post-pandemic environment, persistent and acute skills shortages will still occur and may be better subject to their own list (as discussed later in this chapter). Further, the Committee believes that the skills identified in this way should result in skilled workers in these occupations being given priority entry into Australia and not be subject to labour market testing given that their scarcity has been already established by being on the list.
The Committee recommends that the Government:
Develop accepted definitions of acute skills shortages and persistent skills shortages taking into account:
Length of time the shortage has existed
Number of job vacancies and the geographic spread of vacancies
Criticality of the occupation if left unfilled (e.g. nurses and general practitioners)
Criticality of the occupation to temporary circumstances (e.g. bushfires, floods or pandemics).
Provide employers looking to fill jobs on the PMSOL with more streamlined processes.
Skilled occupation lists
ACCI noted that replacing the 457 subclass visa in 2017 with the Temporary Skills Shortage (TSS) visa led to ‘tighter eligibility criteria and higher costs’ compared to the 457.
According to ACCI, under the 457 all listed occupations were eligible for employer nominated skilled migration, whereas under the TSS:
215 occupations on the STSOL are available for the TSS short-term stream and have no pathway to permanent migration
77 occupations on the ROL are available for the medium-term stream in regional areas
216 occupations on the MLTSSL are available for the TSS medium-term stream.
ACCI told the Committee that the change from the 457 to the TSS removed:
Responsiveness in the system that allowed for employers to satisfy their skill needs – needs that are real even though they may not show up on a national assessment of skill shortages
Pathway to permanency for many occupations which was a fundamental strength of the system...
These changes have led to increased complexity in the system, and created confusion. ACCI stated that in its view, a better approach would have been to retain the Consolidated Skilled Occupation List (CSOL) associated with the 457 ‘as the basis for temporary and employer nominated permanent migration’. Under this approach, ‘integrity issues can be dealt with on an occupation basis through caveats rather than by national skills analysis’.
ACCI elaborated on how this could work:
For example, if a particular occupation was shown by analysis to be the subject of integrity concerns, then a limitation could have been introduced, such as the removal of a pathway to permanency or a shorter term of visa for that one occupation.
Susan Denny, Jane Elliot, Faye Rouse, Sue Rainsford, Taylor Jackson and Rayleen Wright agreed that the four skills lists should be combined, as ‘employers are the ones who really know what skills are in short supply’. In any case, Susan Denny et al. note that the onus and cost of demonstrating that no local person can be found already sits with employers, through labour market testing.
In place of the four skills lists, Susan Denny et al. argued a skilled occupation in demand list ‘be introduced for occupations in high demand nationally’, which provides streamlined access for both independent and employer sponsored visa categories.
Similarly, Fragomen noted that multiple lists ‘adds unnecessary complexity to the skilled migration program’. Fragomen provided an example of this complexity:
…the MLTSSL occupations are not necessarily the same for a Temporary Skill Shortage visa as for a Skilled Independent (subclass 189) visa. Adding to this inconsistency is the imposition of caveats for particular occupations which again, only apply to certain skilled visa programs. For example, the occupation of Anaesthetist 253211 is subject to a caveat which under the Temporary Skill Shortage (TSS) visa program restricts its usage to positions located in regional Australia, whilst under the Training (subclass 407) visa program, the nominated training position could be located in a metropolitan hospital.
Fragomen was also critical of the separation of the STSOL and the MLTSSL, noting that the short-term list not providing a pathway to permanence ‘has created issues for many clients in practice’. While this may have been appropriate when the lists were introduced, in terms of labour and skill shortages Australia is now ‘facing a completely different set of circumstances’. The issue of providing pathways to permanence is dealt with below.
Atlassian and Canva noted that it was ‘unclear… why some occupations are on the short-term list and others are not’. They stated that occupations on the STSOL ‘are in just as short supply in Australia as other occupations we recruit for that are on the long-term list’.
According to CEDA, in addition to updating ANZSCO:
…more transparency on the formulation of skilled occupation lists is needed. The Federal Government’s six-monthly traffic light bulletins are a few pages long and amount to advice rather than analysis. This could be improved by periodically publishing the full labour market analysis against primary and secondary factors, the weighting of different criteria and calculation of points.
CEDA also stated that stronger linkages between workforce planning and the skilled migration program are required. Specifically, CEDA recommended the formation of ‘an independent committee (like the Migration Advisory Committee in the UK) to advise on the formulation and reporting of skilled occupation lists’.
Fragomen noted that ‘the application and the changing nature of the list certainly is disruptive to our clients’, particularly in terms of attraction and retention of talented individuals. In Fragomen’s experience, it was possible that a ‘list might change six times over the course of a qualifying employment period’ for someone seeking to qualify for permanent residency, and that this was ‘daunting and certainly adds a layer of uncertainty’.
The importance of the ROL was highlighted by the Government of South Australia, which noted its support for ‘regional areas having access to a larger occupation list than is available for metropolitan areas’.
The various skills lists emerged as one of the major issues raised by submitters and witnesses to this inquiry.
The issues raised with the separation of the skills lists were twofold. One of the key issues was in relation to some skilled occupations being eligible only for the short-term stream of the TSS, which is examined in greater detail below.
The other key issue was the complexity of the system created by the various skilled occupation lists. A large number of peak bodies from a wide range of sectors raised the various lists as creating confusion and uncertainty for their membership.
Similarly, migration agents noted the confusion and uncertainty experienced by their clients. It is clear to the Committee that both the number of lists and the perceived ad hoc nature of additions and removals to these lists are reducing functionality in Australia’s migration system.
Some submitters also told the Committee that, from the perspective of businesses seeking to sponsor skilled migrants, the basis for the separation between the lists is unclear. That is, occupations appearing on the STSOL rather than the MLTSSL appeared arbitrary and without basis.
In the Interim Report the Committee noted a matter for consideration in the Final Report should be whether the skilled migration system could be more responsive to labour market needs by dispensing with skills lists altogether, and creating a demand driven employer-sponsored migration program with appropriate integrity and labour market testing measures. The Committee considered the demand drive model but ultimately has decided not to pursue it because it was unclear what integrity measures would be sufficient to prevent misuse and rorting of the skilled migration program.
However, the Committee sees value in simplifying the various skills lists. In the Committee’s view, the unique needs of regional areas cannot be adequately served by a single national list. Such a list would focus on occupations which are in shortage in metropolitan areas, given the concentration of population in metropolitan areas.
Further, the concessions associated with the available regional visas are important to their meeting regional skills needs. These concessions are examined further in Chapter 3, but in the Committee’s view it is important to continue providing regional Australia with the wider range of occupations reflected in the ROL.
A key part of the simplification required is the establishment of two national lists. One would reflect established national skills shortages, and would effectively combine the STSOL and the MLTSSL. This list would also assist in terms of clarifying pathways to permanency, which is examined in greater detail below, as it would remove the distinction between the short term and the medium and long term streams associated with the TSS.
The second list would reflect the role currently played by the PMSOL. In the Committee’s view, the PMSOL has played a part in helping to address the skills shortages that are crucial to the COVID-19 pandemic recovery period. Creating a new skills list which reflects the acute and persistent skills shortages discussed earlier in this chapter also provides a capacity for applications under this list to be fast tracked. This will greatly assist in addressing the long-standing skills shortages that have been raised with the Committee through the course of this inquiry.
It is also important that these lists are regularly updated to reflect the most recent data on skills shortages. However, to help prevent confusion and uncertainty on the part of both skilled migrants and their sponsors, it is important that the updates are scheduled so as to provide certainty and predictability to both skilled migrants and business sponsors.
The Committee recommends that the Government consolidate the Medium and Long Terms Strategic Skills List (MLTSSL) and Short Term Skilled Occupation List (STSOL) into one list: the Skilled Occupation List (SOL).
The Committee recommends that when the pandemic is concluded the PMSOL should be replaced by an Acute and Persistent Skills Shortage List (APSSL).
The Committee recommends that the skills lists be regularly reviewed.
Many submitters considered that having a pathway to permanency for skilled migrants and their employers is a critical factor for the Committee to consider. This section will examine the perceived benefits of more consistent pathways to permanency within the skilled migration program and the impact this may have on skills shortages.
KPMG noted that the shift away from the 457 visa to the introduction of two occupation lists constituted a dramatic change. Specifically:
Currently, as you may be aware, if your occupation falls in the short-term list then there is no pathway to permanent residency. But that impact on those individuals also has an impact on the organisations in Australia. The organisations that we work with are telling us that they are unable to find highly skilled individuals wanting to come to Australia, because they are restricted to being in Australia for only two years, with a possibility of renewing for another two years, and then they would need to depart Australia after the four-year period.
As a result, according to KPMG ‘the current program doesn’t support what the businesses actually need in terms of these skilled roles’. KPMG recommended that the two occupation lists be revisited with a view to having one occupation list.
Fragomen raised similar concerns about the current system, noting that it was appropriate for when it was introduced, but that Australia is ‘facing a completely different set of circumstances now in terms of labour shortages, skills shortages and the like’.
Atlassian and Canva argued that there is a need to change the current system, as it ‘creates two classes of temporary workers – those who can become permanent residents (and eventually citizens) of Australia and those who cannot’.
According to Atlassian and Canva:
Whatever the original reasons for the decision to create two types of temporary employees, this creates very significant problems for our businesses at a practical level and a lot of time and effort goes into managing the disparity caused by this in our workforce and in trying to find work around solutions. We have no doubt that this is the same throughout our industry.
Atlassian and Canva provided an example of one effect the lack of a pathway to permanency is having:
Unfortunately, several employees on the short-term list on the last TSS visa have already signalled their intention to leave and settle elsewhere/return to their home country as they want certainty on their future to be able to plan for themselves and their families. Depending where they end up, we may not be able to accommodate an overseas role for them and therefore would miss out on the investment we have made on the individual as well as miss out on their highly niche skill sets.
The Accommodation Association of Australia proposed that there should be a pathway to permanency for all TSS streams, including the STSOL with a focus on areas of high and critical skills shortages. Similarly, Atlassian and Canva argued for the merging of the STSOL and the MLTSSL to provide a pathway to permanent residency no matter the applicant’s nominated occupation.
Clubs Australia discussed this issue in relation to an industry suffering long-standing and critical labour shortages. According to Clubs Australia:
…the feedback we've had from our members is that a pathway to residency would make the prospect of a chef or a cook coming to Australia much more attractive. For a person to come from overseas to Australia for two years and potentially bring their family over with the knowledge that they would be returning to their home country after two years, sending their children to school for two years, is not an attractive proposition for overseas workers.
Fragomen told the Committee that greater flexibility and more streamlined pathways from temporary to permanent visas are necessary’ to maintain Australia’s global competitiveness in skilled migration:
In the competition for global talent, having a clearer, simpler and more certain pathway from temporary to permanent residence will improve Australia's attractiveness and also provide better settlement and integration outcomes for the visa holder. Pathways to permanent residence should be predictable, transparent and reliable such that the potential migrant has a reasonable degree of certainty as to the ability to gain permanent residence.
Mapien proposed that skilled foreign workers who are considering employment in Australia would be strongly influenced by a potential pathway to permanent residency.
According to Mapien, Australia is competing with destination countries like Canada in regard to skilled migrants. Mapien noted that the pathways to permanency in Australia raised uncertainty for some potential migrants, and that the perceived lack of barriers to permanency in Canada had led to it ‘becoming a really, really attractive destination for skilled migrants’.
Similarly, the Migration Institute of Australia (MIA) stated that the lack of a pathway was making Australia less internationally competitive:
While the Government wishes to attract the best and brightest, there is no bright future of permanent residency for those with occupations on the STSOL, especially while competitors such as Canada or European Union countries are offering this incentive.
According to MIA, this lack of a permanent residency option, combined with the two year TSS visa validity and the ability to only apply for two additional visas while in Australia, ‘combine to make Australia a less attractive designation for skilled migrants with occupations’ on the STSOL.
Austrade similarly noted the barriers their clients face because of the lack of a clear pathway to permanent residency:
Occupations on the STSOL are normally eligible for up to a two year stay, while occupations on the MLTSSL offer a four year visa with a pathway to permanent residency. While many Austrade clients report occupations required to support new industries are on the short term list, they also report that highly qualified skilled migrants are reluctant to relocate families and disrupt their careers for a short-term work opportunity in Australia. For many industries, the short-stay visa offering is not competitive internationally.
Atlassian and Canva outlined the issues which the lack of a pathway creates for their business and its employees:
Individuals who do not have a permanent pathway feel less committed to long-term goals and consider themselves disadvantaged and deeply misunderstood in terms of their tech skill set and the demand for that skill set in the global market compared to those who have a pathway.
The fact that a position has no pathway also reduced the candidate pool and discriminates against those with families, as these candidates are far less likely to want to relocate for only two years (maybe four).
In Atlassian and Canva’s view, the ‘pathway to permanent residency should be based on an employer’s demonstrated need’ and not on decisions made by government about the state of the labour market.
The Law Council of Australia also highlighted the perceived disincentive to migrate to Australia for those with skills on the STSOL:
To attract global talent, Australia needs a clearer, simpler and more certain pathway from temporary residence to permanent residence. Waiting for three years to move from the employer sponsored Temporary Skill Shortage (TSS) visa to the employer sponsored Employer Nomination Scheme (ENS) visa, with occupation lists potentially changing and impacting the pathway to permanent residence, dissuades talented individuals from considering a move to Australia.
The Regional Australia Institute considered that the visas which would be of most benefit to regional Australia are those which have an accessible and realistic pathway to permanency.
In order to address the perceived lack of a pathway to permanency for some skilled migrants, AMES recommended a substantial increase in the skilled migration intake for the 2021-22 financial year. According to AMES:
This could include a higher allocation for subclass 189 and the state sponsored visa pathways such as subclass 190 and subclass 491, which will create a strong skilled pipeline that businesses can tap into to fill critical labour shortages in metropolitan and regional areas.
Some submitters have noted that there can be problems with a skilled migrant effectively being tied to a single employer where that migrant’s progress to permanent residency is dependent on their continued employment with their employer. The Construction, Forestry, Maritime and Energy Union (CFMEU) added a note of caution, noting that a 2008 review of the 457 visa found that many temporary migrants will accept substandard wages and conditions in order to qualify for permanent residency.
Similarly, Fragomen added a note of caution:
…for those lower-skilled occupations, where a temporary worker might feel less able to raise concerns due to the necessary link of their employment to their visa. If they are required to remain with that employer for a longer period of time, there may be concerns as to whether or not they may be willing to assert workplace rights et cetera for fear of jeopardising their eligibility pathway to permanent residence.
The Committee received a large amount of evidence advocating for clearer and more consistent pathways to permanent residency, particularly in relation to applicants for the short-term stream of the TSS.
The evidence received notes that this step would provide clarity for skilled migrants, which in turn would allow sponsors to both access the skills they need through the migration system, and have more certainty about the long-term result that can be expected from committing to the time and expense required to sponsor a skilled migrant.
In the current circumstances, where Australia is competing with similar countries such as Canada for the pool of potential migrants, this reform would assist in maintaining Australia’s international competitiveness. In the post-COVID-19 recovery period, international competitiveness will be crucial for Australia, as international travel re-opens and potential migrants are able to travel to an increasing number of potential destination countries.
The Committee sees value in ensuring that all employer-sponsored visas include a clear pathway to permanent residency with conditions for the length of time to permanency varying from visa to visa depending on skill level and other necessary considerations. As noted by many submitters to this inquiry, recent reforms to the skills lists underpinning the skilled migration program following the abolition of the 457 visa have led to a situation where there are essentially two classes of skilled migrants.
The Committee considers that the conditions for permanency should continue to include competent English language ability and that applicants should be under the age of 45, with possible exceptions for regional visas.
Those with skills in the medium and long-term stream of the TSS have a clear pathway to permanency, while those with skills on the short-term stream list do not have this clear pathway. Given perceptions about the arbitrariness of separation of occupations between the two lists, the Committee believes that combining the lists along with ensuring that all employer nominated visas provide a clear pathway to permanency will simplify the skilled migration system and provide greater clarity to both applicants and sponsors. This does not mean that the pathway should be the same for all skilled occupations or all visa holders but there should be a pathway and it should be clear.
When the changes are in place these changes could apply to both current and future 482 visa holders.
The Committee considers that if integrity concerns about particular occupations arose, limitations (such as the removal of a pathway to permanency or more stringent criterion for qualifying for permanency) should be put in place.
The Committee recommends that the Department of Home Affairs should change the visa conditions for the short-term stream of the Temporary Skills Shortage visa (subclass 482) to provide a pathway to permanent residency for temporary migrants.
All employer nominated visas should provide the option of a pathway to permanency. The length of time to permanency and the conditions involved may vary from visa to visa with, for instance, applicants in lower skilled occupations taking longer to reach permanency than more highly skilled visa holders.
Conditions for permanency should continue to include:
Competent English language ability; and
Applicants should be under the age of 45.